Home News Home buyers are backing out of contracts in the Sun Belt, especially in Las Vegas, Phoenix, Tampa and Texas

Home buyers are backing out of contracts in the Sun Belt, especially in Las Vegas, Phoenix, Tampa and Texas

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As the tide turns, interest rates rise and home prices remain affordable, buyers are pulling back from trading in the Sunbelt.

Once a pandemic boomtown, 15.2% of homes in Sunbelt cities that were contracted in August went bankrupt, or nearly 64,000 homes across the country withdrew. new report Real Estate Broker Redfin Corp.
RDFN,
+5.70%

Said.

A year ago, only 12.1% of homebuyers stopped trading. Redfin said 12% of his deals typically failed to close before the pandemic. But the last time the numbers spiked was before this fall, in March or April 2020, when the coronavirus pandemic started.

Buyers are most likely to withdraw from Sunbelt deals in cities such as Phoenix, Tampa and Las Vegas, the company added. was low.

“The slowdown in the housing market means that buyers won’t have to give up key contingent contracts to compete like last year’s homebuying frenzy, so buyers can scrap deals.” said Redfin.

Contingencies may include inspections to see if there are problems with the home, if you can get the mortgage you need, or if the appraised value differs from the agreed amount.

“A slowdown in the housing market will allow buyers to scrap contracts.”


— Redfin

“Some buyers may also be pulling out of deals as they wait to see if home prices will drop,” the company added.

More than a quarter of buyers looking to buy a home in Jacksonville, Fla., declined in August, according to Redfin. This is the highest percentage among the 50 major U.S. metropolitan areas of Las Vegas, Atlanta and Orlando. (Top 10 list below)

These destinations were hotspots for buyers during the pandemic because they were affordable and in an era of remote work.

But that has changed.

“Cities in the Sun Belt, including Phoenix, Tampa and Las Vegas, have attracted large numbers of home hunters during the pandemic, pushing up home prices,” Redfin said.

“Their housing market is currently cooling the fastest in the country, and buyers have the flexibility to decline,” they added.

Redfin analyzed data from multiple listing services going back to 2017 to analyze dropouts.

Newark, New Jersey had the lowest percentage of buyers canceling deals at 2.7%, followed by San Francisco, Nassau County, New York, New York City and Montgomery County, Pennsylvania.

A big reason for cancellation is the high price. 30 years is 6.29% as of September 15This is up from 2.88% a year ago.

Houses are still expensive. Although prices for resale homes are falling, the average resale home price in the US was still $389,500 in August, up 7.7% year-on-year. The National Association of Realtors said.

“Sellers are encouraged to price their homes competitively based on the current market.”


— Miami-based real estate agent Sam Chute, Redfin

With a nervous buyer in such a tough situation, I advise sellers to price their homes competitively based on the current market. I will pay.”

To be clear, property market indigestion is intentionally constructed. With housing prices falling as a result of rising interest rates, sellers reacting to lower demand is “Good thingsaid Federal Reserve Chairman Jerome Powell. at Wednesday’s press conference when they announced a rate hike.

“House prices were rising at an unsustainable rate,” Powell said.

“In the long run, supply and demand need to be better aligned so that house prices can rise at reasonable levels and people can buy homes again,” he added. “The housing market may need to go through an adjustment to get back on track.”

These are the top 10 cities with failed deals.

city

% of pending sales out of contract

jacksonville, florida

26.1%

Las Vegas, Nevada

twenty three%

Atlanta, Georgia

22.6%

orlando, florida

21.9%

Fort Lauderdale, Florida

21.7%

Phoenix, Arizona

21.6%

Tampa, Florida

21.5%

Fort Worth, Texas.

21.5%

San Antonio, Texas.

21.1%

Houston, Texas.

20.6%

Thinking about the housing market? Write to MarketWatch reporter Aarthi Swaminathan ([email protected]).

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